Westpac chairman Lindsay Maxsted is expected to explain to shareholders why the bank suddenly changed its tune on a royal commission at its annual meeting on Friday.

Westpac is under increasing pressure to settle a landmark court case brought by the corporate watchdog over the alleged rigging of one of Australia's key interest rates after its fellow accused, ANZ and National Australia Bank, folded last week.

The corporate regulator's landmark case against Westpac over allegedly irresponsible home loan practices does not show customers suffered "any hardship", the bank has told the Federal Court.

The Australian Securities and Investments Commission is taking action against Westpac in the Federal Court on Thursday, alleging that two of the bank’s subsidiaries breached “best interests” obligations and provided personal financial advice when they were not permitted to do so.